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Sec 44 ad

Surbhi Jalan (Chartered Accountant) (33 Points)

01 October 2013

u/s 44AD what is the definition of Total income? Is it Gross Total Income or Taxable Income? Or the argument goes both sides? Please explain.. My client is having turnover of less than 1 cr. and GTI is 2.5L. But after deductions under chapter VIA, Taxable Income is 1.5L. What can be the consequences?? No tax audit has been done.

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4 Replies

dhruv patel (ca) (75 Points)
Replied 01 October 2013

Sec. 44AD considers the gross total income excluding any dedution and it must be more than 8% of total turn over .. .... in yr case you have to show yr income more 8%of the total T/O.. otherwise the tax audit is must u/s 44AD

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v.shankara kumar(Vsk) (Principal ) (25 Points)
Replied 01 October 2013

As turnover less than 1 cr, yr client can opt for 44AD. you have not mentioned TO. Pls cal 8% of TO , that gives u GTI. Minus deduction u/s 80C to 80U gives TI

Surbhi Jalan (Chartered Accountant) (33 Points)
Replied 03 October 2013

Turnover is around 96lacs.. I guess my client can be at a problem.. :( No tax has been paid as after deduction total income was 1.5lac.

srikumar (audit staff) (1203 Points)
Replied 12 October 2013

turnover below 8% tax audit must. lessthan 1 crore the gross turnover equal to 8% , there as no worry, otherwise tax audit attract

surbhai jalan sir your case turnover lessthan 1 crore ( ex.95lakhs) gross taxable income is 760000 less chap VI A for taxable income is 660000.( no books manitain and no tax audit for this example )otherwise tax audit

this my opinion any body feels its wrong pls explain that to all